RPT-FEATURE-US feedyards suffer as hamburgers replace steaks

By Bob Burgdorfer

CHICAGO, Feb 27 (Reuters) - Americans are eating more hamburgers and fewer steaks as the economy wallows in recession, and that has led to huge losses at U.S. feedyards that fatten the cattle for steaks.

Each week $100 million is lost as feedyards from Nebraska to Texas sell cattle at well-below production costs.

The losses have been so bad for so long that economists predict many feedyards will either close or shrink. That, they claim, will mean higher-priced beef for consumers when the economy does recover.

The United States is somewhat unique amid global beef producers in that most of its cattle are fattened in feedyards on grain and other nutrients, as opposed to grazing on lush pastures.

These grain-fed cattle produce the juicy steaks preferred by gourmands, fine-dining restaurants and cookout enthusiasts.

"The losses have been so large in the first three months of 2009 that it is going to be months and months and months until feedyards even have a chance to recover those losses. It is depressing," said Jim Robb, economist at the Livestock Marketing Information Center.

As the global economy soured, many consumers around the world shifted away from white table cloth restaurants to fast-food hamburger chains or to at-home dining.

"I think what people are missing is it is not a drop in beef demand so much, as it is what sort of beef people are eating," John Josserand, president of AzTx Cattle Co, said of the change in beef consumption. "People are eating at McDonalds instead of Outback."